The 4th Industrial Revolution: Investing in connected mobility and sustainable impact in transportation
There is a significant opportunity for investors to finance the Fourth Generation Industrial Revolution that is reshaping global transportation. But opportunities are limited to investors with unique domain knowledge, expertise, and access to companies at the vanguard of this transformation.
According to the World Economic Forum, about 70% of the world’s population will live, commute, and work in urban areas by 2050. Between now and then, cities and suburbs will undergo significant transformations to create sustainable living conditions for their residents. This requires the optimization of resources and logistics, as well as the intelligent flow of people and vehicles within this ecosystem. Mobility and energy are the dominant pillars of these changes, and both will require radical adaptation and significant capital to meet demographic and economic growth without increasing congestion and pollution.
A more agile urban ecosystem
Cities will require more agile transportation, mobility, and energy solutions that are sustainable, affordable, secure and inclusive, and integrated with customer-centric infrastructure and services. As a result, the convergence of energy and mobility in transportation is critical to the flow, development, innovation, and livelihood of cities—which is a $15 trillion dollar market in the making.
Mobility connected technology solutions will affect all forms of transportation—land, sea, and air, creating impact through an interdependent, cleaner, more efficient, sustainable, transportation grid for smart cities and connected ecosystems of the future. This global trend will be led by “New Economy” technology solutions in software applications for connected services, telematics and logistics, alternative fuels, infrastructure support, and smart-grid connected solutions.
According to the World Economic Forum, “these are exciting times in which new technologies allow people to rethink the way they live in a more sustainable and efficient manner. Smart mobility in transportation. Smart water. Smart grid. Smart integration. These are the foundations of tomorrow’s cities, which are being realized today.”
Electrification, decentralization, and digitalization
Electrification, decentralization, and digitalization act in a virtuous cycle, enabling, amplifying, and reinforcing developments beyond their individual contribution. Their integrated deployment could generate more than $2.4 trillion of value globally for society and industry by 2025 by increasing the efficiency of the overall system, optimizing capital allocation, and creating new services for customers. (For more, read The Future of Electricity: New Technologies Transforming the Grid Edge, published by the World Economic Forum in March 2017.)
This grid is becoming truly interdependent. This reveals the broader infrastructure that is evolving to support intelligent vehicles, which will create ripple effects throughout the entire transportation ecosystem and beyond.
Connected mobility in transportation
The transformation in passenger travel, public transportation, last-mile delivery, route optimization, and long-haul transport will be led by software applications in connected services, telematics and logistics, alternative fuel vehicles, infrastructure support, and smart-grid solutions. The spending needed to support these components is expected to be at least $3.5 trillion over the next ten years. This change is a fundamental departure from past incremental advancements in vehicle development led by global auto OEMs, but instead is led by software apps together with complimentary hardware to provide technology solutions driven by global government regulation, grass-roots development, the entrepreneurial spirit, and end customer demand.
Transportation represents $16 trillion or 15% of the global economy, and this market is undergoing massive change with technology driving the transformation:
- The global smart transportation market is forecasted to climb to $285 billion by 2024 with a CAGR of 22%.
- Connected mobility and services will exceed $220 billion by 2022.
- Mobility connectivity includes many traditional VC (venture capital) markets including: big data, real time analytics, connectivity, cloud-based apps, semis.
Connected mobility is a prime example of the Fourth Industrial Revolution as it undergoes transformation, becoming more complex than ever before, with rapidly evolving technologies, emerging innovative business models, and shifting regulatory landscapes. Significant alpha will be generated in this vertical, and visionary entrepreneurs and venture-capital firms with the domain knowledge and a refined business thesis can capture it.
About Van Wagoner Ventures
Van Wagoner Ventures is the leading financier of mobility connected technology solutions supporting impact through an interdependent, cleaner, more efficient, and sustainable transportation grid. This ecosystem is about to embark on fundamental changes over the next five years that outpace the last 50 years and will revolutionize how we travel, transport goods, and live our daily lives. The result will be a cleaner, sustainable transportation ecosystem.